"Actual knowledge" December 24, 2015
Beazley P at ;
Basten JA at ;
Macfarlan JA at ;
Meagher JA at ;
Simpson JA at 
Authority of Roman
- In Roman, McColl JA stated:
“ It is a reasonable inference that s 45 was intended to prevent roads authorities from being held liable in Brodie  circumstances merely for failing to take reasonable steps to look for such risks as might reasonably be expected to arise. On the other hand, s 45 presupposes a system of inspection by which a roads authority can acquire actual knowledge of particular risks. That system of inspection must exist as an essential adjunct to the roads authority’s obligation to keep roads in a reasonable state of repair at least implicit, if not expressed, in its function of carrying out road work.
 Section 45, in my view, indicates a legislative intent to strike a balance between the community’s legitimate expectation, that public roads will be reasonably safe to traverse, and the extreme consequences which would flow, in revenue terms, if a roads authority could be found prima facie liable for injuries arising from risks of which it had only constructive knowledge. So much, at least, is evident from the structure of the provision and the Second Reading Speech.
 Nothing in s 45, in my view, precludes the conclusion that the actual knowledge which will be attributed to the roads authority will at least be that of those relevantly involved in the authority’s system of inspecting roads who have a duty to report their knowledge of a particular risk and/or who have a responsibility for repairing the road, or to consider repairing the road, if such a risk is brought to their attention.”
- There are difficulties with that approach. First, the reasoning at  accepts that s 45 provides immunity for a road authority from liability “merely for failing to take reasonable steps to look for such risks as might reasonably be expected to arise.” That is, there will be no liability for a negligent failure to inspect or for carrying out an inspection negligently so that a risk is not identified. The next sentence states that “s 45 presupposes a system of inspection”. The source of that assumption is not identified in the language of s 45. Rather the obligation to inspect appears to be derived from the function of undertaking road work under the Roads Act 1993 (NSW). Whereas there is undoubtedly a statutory power to undertake road work, the translation of that power into a statutory obligation to carry out inspections is not explained. Nor is it a duty which can lightly be assumed. No argument was presented in the present case to justify the existence of such a statutory duty, nor its scope.
- Some of the uncertainties just noted are removed by the test proposed by Tobias JA in Hocking where he rephrased the criteria adopted by McColl JA inRoman to read: 
“…the actual knowledge required by s 45(1) must be that of those officers of the authority whose responsibility it is to inspect roads and who have the duty to report their knowledge of the particular risk to those responsible for repairing the road or to consider repairing the road when such a risk is brought to their attention.”
- However, Tobias JA appeared to accept the negative approach to construction adopted by McColl JA. Thus, whilst finding that both constructions identified in Roman were “consistent with the language of [s 45(1)]”,  he nevertheless rejected the majority approach because “the language of s 45(1) does not mandate such a construction.”  Accordingly, it is necessary to consider further the principled basis upon which such a negative approach to the question of construction may be justified.
- The reason given was that the “narrow” approach was one which “would unnecessarily and unjustifiably place a premium on ignorance which the language of the section does not require”.  However, the criterion of immunity identified by the section is indeed “ignorance”, or lack of “actual knowledge of the particular risk”. As acknowledged by McColl JA in Roman, it is precisely the failure of a roads authority to identify risks of which it ought to be aware for which immunity is granted.
- An alternative approach, which the appellant implicitly sought to derive from the comments of Kirby J during the High Court special leave application inRoman, is that sometimes described as the principle of derogation (that is that statutes which derogate from the common law should be strictly construed) or, in more modern Australian parlance, the principle of legality.  The source in Australian jurisprudence is usually located in the judgment of O’Connor J in Potter v Minahan  quoting Maxwell on Statutes: 
“One of these presumptions is that the legislature does not intend to make any alteration in the law beyond what it explicitly declares …, either in express terms or by implication; or, in other words, beyond the immediate scope and object of the Statue. In all general matters beyond, the law remains undisturbed. It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used.”
- The application of the principle in Potter was in fact quite muted. The question was whether a person, once a member of the Australian community, who departed temporarily and sought to return, was an “immigrant” for the purposes of the Immigration Restriction Act 1901 (Cth). O’Connor J stated that “the meaning of the word ‘immigrant’ must not be extended beyond its ordinary signification if such interpretation would affect rights of Australian-born subjects to a greater extent than the scope and purpose of the Act require.”  There is an important distinction between reading down and not extending the ordinary meaning of a word.
- Age and repetition have given the statement from Maxwell on Statutes a patina of authority which may not be warranted. It derived from a legal culture sceptical of the inroads being made by statute on judge-made law.  A more measured approach, adapted to modern times, was preferred by McHugh J in Malika Holdings Pty Ltd v Stretton.  McHugh J noted the need to be cautious in identifying “fundamental principles”, but more importantly adopted a different approach with respect to laws which “infringe rights”, noting that that was what Parliament commonly does.  He doubted the utility in the present age of such a clear statement rule of construction with respect to laws that “infringe rights, or depart from the general system of law”. McHugh J continued: 
“In those areas, the rule is fast becoming, if it is not already, an interpretative fiction. Such is the reach of the regulatory state that it is now difficult to assume that the legislature would not infringe rights or interfere with the general system of law.”
- As noted by the Full Court of the Federal Court (French, Finn and Sundberg JJ) in Gumana v Northern Territory,  “[i]n this core area of fundamental rights and freedoms the interpretative presumption retains strength and vitality.” The Court then adopted from Malika McHugh J’s articulation of a “surer guide to the legislative intention in areas of legislation dealing with ordinary rights” being “to construe the language of the enactment in its natural and ordinary meaning, having regard to its context – which will include other provisions of the enactment, its history and the state of the law – as well as the purpose which the enactment seeks to achieve.” 
- That approach should be adopted with respect to a law enacted in 2002 to deal with rights effectively created by a decision of the High Court in 2001, the sole of purpose of s 45 being to contain and restrict the effect of the judgment in Brodie. In this context, judicial opinions as to the effect of economic incentives created by an expanded tortious liability cannot govern the construction of a statute self-evidently intended to limit that liability.
- A further difficulty with the reasoning in Hocking is that in stating that the minority approach in Roman “is to be preferred” over that of the majority, Tobias JA did not approach the question of departure from existing authority in accordance with the principle of restraint referred to above. (Although Hockingpre-dated Gett, it did not pre-date most of the authorities discussed in Gett.)
- Despite the foregoing criticisms, there is an attraction in the formulation adopted by Tobias JA and set out at  above. Within a body responsible for the maintenance of roads, it is to be expected that there will be a division of functions. One function is the identification of the need for repairs or reconstruction. Another is the identification of defects. The latter may be assigned to officers who do not have decision-making power in relation to the carrying out of road work. Both functions may involve a delegation of the authority’s powers in a manner which would justify the conclusion that the knowledge of any of those officers is the knowledge of the authority.
- This Court will not depart from one of its earlier decisions unless it is demonstrated that the decision is plainly wrong. This requires the later Court to form a strong conviction “that the earlier judgment was erroneous and not merely the choice of an approach which was open, but no longer preferred” and that the “nature of the error … can be demonstrated with a degree of clarity by the application of correct legal analysis” (Gett v Tabet  NSWCA 76; 254 ALR 504 at ).
- It is unnecessary to examine in detail the two strands of judicial reasoning in relation to s 45 of the Act as I do not consider that, even if the views of McColl and Tobias JJA were preferred, it could be said that the majority’s reasoning in Roman was plainly wrong in the sense described in Gett v Tabet.
- Basten JA’s reasoning in Roman was, effectively, that because s 45(1) of the Act confers immunity where a Council, as a “roads authority”, fails to carry out road work, the exception in respect of “actual knowledge” of the defect giving rise to a risk should logically only apply where an officer responsible for exercising the Council’s power to carry out the work had that knowledge. At the least, this is an arguably correct approach to the proper construction of that sub-section. In Hocking, Tobias JA accepted that this approach is not inconsistent with the language of the provision, although his Honour nevertheless preferred the alternative construction in light of other considerations.
- In these circumstances, the appeal must be determined on the basis that Roman remains a binding authority.
Negligent inspection and s 45
(7) The immunity under s 45 applies because the immediate cause of the appellant’s injury was a failure to repair the footpath.  (Basten JA); - (Macfarlan JA);  (Meagher JA).
(8) A construction of s 45 by which a roads authority’s negligent inspection would preclude it from relying on the immunity undermines the purpose of the provision and should not be accepted.  (Basten JA);  (Meagher JA).
Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297
(9) It is not necessary to finally determine the application of s 45 to negligent inspection by roads authorities as, in the present case, the appellant failed to establish such negligence. - (Beazley P, dissenting on this point).
(10) The negligent carrying out of inspections would not be subject to the s 45 immunity and could result in a finding of liability in the Council, subject to questions of causation. As findings on those questions have not been made, the appeal should be allowed and a new trial ordered. - (Simpson JA, dissenting).
Strong v Woolworths Ltd  HCA 5; 246 CLR 182; Wallace v Kam  HCA 19; 250 CLR 375